Lincoln will land in China in second half of 2014
TOKYO -- Ford Motor Co. plans to launch its Lincoln luxury brand in China in the second half of 2014 as the automaker plays catch up in the world's biggest auto market.
CEO Alan Mulally announced the move today during a swing through China to break ground on the company's third assembly plant in the city of Chongqing.
The brand will be sold through an independent dealer network, and the company will begin meeting aspiring dealers in the fourth quarter of this year, Ford said in a release.
"Introducing Lincoln in China marks the next step in our expansion in Asia and our commitment to serving customers in the luxury market," Mulally said.
The launch of Lincoln in China comes even as Ford struggles to rebuild the brand in its home market of the United States. Global marketing and sales boss Jim Farley said Lincoln will stand out in China by offering more individualized and personalized products.
Ford is a late bloomer in China. But is moving fast to catch up. It will deliver 15 new Ford-branded vehicles and 20 powertrains by 2015 to Chinese customers. And it is building five plants to double production capacity in China to 1.2 million units a year.
Tapping China's rapidly expanding luxury market is a key element of Mulally's bid to boost Ford's global sales by 50 percent from 2010 to 8 million by mid-decade.
The luxury segment there is forecast to surpass the luxury segment in the United States by 2020, Ford said, citing an outlook of IHS. Luxury vehicle sales are expected to more than double -– from 6 percent of the market today to nearly 9 percent by the end of the decade, and annual sales of luxury cars are forecast to be approximately 2.7 million units by then.
The Lincolns to be sold in China will initially be manufactured in North America, The Associated Press reported. Local production will be considered later, depending on sales.
Ford has eyed a Lincoln launch in China for two years and designed the 2013 MKZ sedan with Chinese tastes in mind, the AP said, citing Mulally.
Ford released a photograph of Mulally, Farley and other executives standing around a burgundy MKZ parked in front of an ancient Chinese temple.
Photo credit: Nelson Ching/Bloomberg
Following GM, VW
Ford follows GM in stepping up efforts to compete in China's luxury-vehicle market. Volkswagen's Audi, BMW, and Mercedes currently dominate the market, accounting for more than three-quarters of high-end cars sold in the country.
"The decision to bring a luxury brand to China is a bold decision but it's a necessary decision," said Bill Russo, a Beijing-based senior adviser at Booz & Co. "If you're a global company with global brands you have to have global brands in China."
Ford is counting on China to help revive growth of its premium nameplate, which has seen deliveries tumble more than 60 percent since their peak two decades ago. Ford, which in 1922 bought the brand named after former U.S. president Abraham Lincoln, plans to unleash seven new Lincoln models -- including the glass-roofed MKZ sedan -- by 2015 as it seeks to attract younger, wealthier customers.
"The neat thing is the recognition of Ford and Lincoln is very, very high" in China, Mulally said today. "People have been following these vehicles for a long time. So now the real thing is to introduce the people to the specific vehicles."
He declined to say how much Ford will spend to bring and promote Lincoln. The automaker today named Richard Baker as general manager for the Lincoln brand in China. Baker was deputy GM at Changan Ford Sales Co. prior to the appointment.
Ford only accounts for 2.4 percent of the country's light-vehicle market, versus VW's 19 percent and GM's 10 percent, according to data from industry researcher LMC Automotive. Ford's share of the more lucrative luxury segment is practically non-existent.
That's because Audi, BMW, and Mercedes-Benz dominate by accounting for 76 percent of the Chinese luxury market, according to data from LMC Automotive. The German automakers have succeeded partly because they tailored their cars to Chinese consumer preferences, selling long wheelbase versions of traditional sedans to cater to the need for more legroom in the backseat.
GM is renewing a push for its Cadillac vehicles in China. GM said in April it plans to bring in more Cadillac products, increase local production and sales outlets in China to boost sales five-fold and match U.S. deliveries by 2020.
Ford's Lincoln announcement comes a day after it said the National Development and Reform Commission approved Ford's application to have a separate venture with Changan Automobile Co. instead of the current three-way ownership with Mazda, paving the way for the company to increase control of its China expansion and product rollouts.
Bloomberg contributed to this report.
You can reach Hans Greimel at firstname.lastname@example.org. -- Follow Hans on